By
Lenie Lectura - November 27, 2017
THE Department of
Information and Communications Technology (DICT) is set to formalize an
agreement with the National Grid Corp. of the Philippines (NGCP) and the
National Transmission Corp. (Transco) on Wednesday for the use of the latter’s
fiber-optic cables as part of the government’s plan to provide high-speed
Internet in the country by 2019.
The signing will take
place on November 29, DICT Officer in Charge Eliseo Rio Jr. told the
BusinessMirror. Rio said the memorandum of agreement (MOA) is for the DICT to
be able to use NGCP and Transco’s fiber-optic cables as backbone.
NGCP’s fiber-optic
cables span 6,154 kilometers or 160,779 fiber kilometers that, Rio said, “can
accommodate the needs of a third or even fourth telco [telecommunications
company].” However, the DICT needs to utilize “just a portion” of the
fiber-optic cable system, he added.
When sought for
comment, NGCP Spokesman Cynthia Alabanza said the grid operator is looking
forward to this agreement “so the project can start.” Alabanza, also a lawyer,
however, emphasized that the agreement is meant “to explore first” the
partnership as “due diligence would still have to take place.”
NGCP, in the past, said
it will allow the DICT to piggyback on the grid operator’s unused portion of
fiber- optic cables, which are primarily used for internal communication. This
move will help ease the infrastructure burden faced by the DICT.
NGCP maintains there is
still a need for the government to provide last-mile connections and
telecommunications-grade redundancies to deliver services to the end-users.
NGCP is a Filipino-led,
privately owned company in charge of operating, maintaining and developing the
country’s power grid. The company is led by majority shareholders Sy Jr. and
Robert Coyiuto Jr.
NGCP has been awarded a
25-year concession deal to operate and manage the transmission facilities.
However, Transco still owns the assets.
“While Transco own the
transmission system, it has an agreement with NGCP to have exclusive right to
use and manage the national grid,” Rio said. “Yes, we have already talked with
them and would soon sign a MOA with them.” The DICT official also said that the
MOA with Transco will not affect its plans to offer telco services as earlier
pronounced.
“The DICT will just use
a part of the dark fiber of the Transco fiber-optic cable. Transco has so much
capacity that our use will not affect whatever plans they have regarding a
third telco,” Rio said. “In fact, they have already approved in principle DICT’s
use of their FOC [fiber-optic cable].” Dark fiber refers to the strands in a
fiber-optic cable that are unlit or still unused.
When sought for
comment, Transco President Melvin Matibag also welcomed the deal with the DICT.
“That is even a better
development because it will complement our plan,” Matibag said. “The LBI [Luzon
Backbone Infrastructure] will need a backbone and the last mile to have it
connected to the entire nation and to every household.” Transco earlier
unveiled plans to offer telco services. It is determined to do so.
“We are still pushing
for Transco’s [conversion] from utility to a telco, or combinations of these.
The end result, however, is a third telco player, which is the government,”
Matibag said . “I already forwarded to the secretary and to our board my
position paper to convert Transco from utility company to a telco.”
Rio, who was designated
by Malacañang as officer in charge of the DICT on October 10, came up with a
road map with the objective of improving the speed and cost of Internet access
in the country.
The road map also gives
time-based, technology-neutral and telco-neutral solutions to some major
problems that beset the information and communications technology
industry, according to Rio. Aside from signing the historic landing party
agreement (LPA) with the Bases Conversion and Development Authority (BCDA) and
Facebook Philippines Inc. on November 15, the DICT will have accomplished the
signing of the MOA with the NGCP/Transco, start the first bidding process for
free Wireless-Fidelity access points by 2022 and identify a possible third
player, even fourth, and have frequencies available for them to effectively
compete.
Before the year ends,
the DICT should have also started an assessment with common tower providers
that will lease telcos and other interested small players, thus leveling the
playing field in cell-sites rollout.
Under the LPA between
the DICT, BCDA and Facebook, two cable-landing stations in Baler, Aurora,
Quezon, and Poro Point, San Fernando, La Union, will be constructed by the
BCDA. Also, a 250-km fiber-optic cable corridor connecting the two will be
built by the BCDA. Both will cost P975 million.
The LBI will be
completed by the third quarter of 2019. Upon completion, it will be turned over
by the BCDA to the DICT, which will then operate and maintain it for 25 years
at an approximate cost of P100 million a year. Facebook will be the first user
of the LBI, allowing the company to bypass the Luzon Strait, where submarine
cable breaks frequently occur because the area is prone to earthquakes and
typhoons.
For using the LBI,
Facebook will remunerate the government at least 2,000,000 Megabits per second
or 2 Terabits per second (Tbps) international cable-link capacity, 25 percent
of which will go to the BCDA. Rio said this is more than the capacity of either
Globe Telecom Inc. or PLDT Inc.
The 2Tbps international
cable-link capacity has a peso value of around P4.8 billion a year, making the
investment of the government almost negligible over the years.
“There are around five
submarine cable owners other than Facebook that would surely use the LBI to
bypass the Luzon Strait,” Rio said. “This will increase the government’s
capacity from 2Tbps to at least 12Tbps in a short period of time, at no
additional cost to the government other than the initial P975 million cost of
LBI and the P100-million yearly maintenance cost.”
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